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Q & A with Greg Koch of Stone Brewing

If you like kick-ass beer, then you like Stone Brewing. The Escondido Calif.-based brewery has a rabid following in the craft beer world and direct ties to USC. Greg Koch, class of 1987, co-founded Stone in 1995 and has helped build it into a juggernaut. It’s the largest craft brewery in the southwestern United States, and as CEO, Koch oversees 275 employees, the production of 100,000+ barrels of beer a year, and its distribution to 35 states. And to think, it all started with a fortuitous glass of Anchor Steam at graffiti-covered bar not far from the SC campus.

Koch talked to TrojanWire’s Patrick Sauer about Stone’s humble beginnings, what goes into deciding on a name like Arrogant Bastard, and why the most important lesson he learned at USC didn’t come in a classroom.

TW: When did you first get interested in craft beer?

Koch: It was actually while at USC. I used to hang out at place called Al’s Bar. It was downtown Los Angeles in the warehouse district, a punk haunt covered in graffiti. I used to go to their No-Talent open mic night, always interesting. They had Anchor Steam on tap; it was the first place I discovered beer could actually taste really good.

TW: Were there many places to get quality beer at that time? This was before the brewpub thing started to take off, correct?

Koch: I think the first brewpub opened around 1982, so it had started, but it was sparse across the United States. After I graduated from USC in 1987, I hung out a lot at a place called Gorky’s. It was a downtown hipster 24-hour restaurant type of place where they started brewing. They put in a system and I found the process of brewing beer totally fascinating. Around that time, a buddy of mine started taking me to all these brewpubs that were sprouting up and I started learning about the world of craft beer.

TW: Obviously, it made an impression…

Koch: Every time I would learn a little bit, I would want to learn a little bit more. I started going to breweries and beer festivals and the like. I’d say 1989-93 were the most formative years where I developed my fanboy beer geekdom.

TW: What were you doing to earn a living in those days?

Koch: I worked in the music industry. I did some production, managed bands, and built a rehearsal studio in downtown L.A. that I still own.

TW: Are you a musician?

Koch: I spent a year at the Musicians Institute in Hollywood before finishing up in business school at USC. I do play guitar, but wisely, I don’t break it out at Stone Brewery.

TW: So when did you get into the business of suds?

Koch: As time went on, I just found myself more interested in beer. I met up with Steve Wagner at a weekend beer class at UC-Davis. We realized we had complimentary skills and backgrounds and decided to partner up.

TW: Why did you choose San Diego?

Koch: Both Steve and I wanted to be in Southern California because it was a blank canvas. There was a dearth of brewing culture, so Stone could experiment and create one, but we didn’t feel like L.A. was the right place to start. In early 1995, I visited a friend down in San Diego. I was born in Orange County, but grew up in Pataskala, Ohio. I’d never spent any time down in San Diego, but right away, I thought it was the ideal place. Steve agreed. I moved down a few weeks later and started site selection.

TW: Where did you get the seed money?

Koch: We were able to secure $500,000 in angel financing. We bought a 30-barrell system and started brewing beer.

TW: Where did you get your beer recipes?

Koch: Steve and I are different people, but we’re similar in our opinions about what makes great beer. We wanted to make beer that was more flavorful and unique. We liked what was possible in the world of beer but wasn’t being expressed much at that time. Back then, breweries were conservative in their approach. We collaborated on the styles of beers. It was a team effort, but Steve came up with the recipes. He’s our brewmaster and he deserves the lion’s share of the credit.

(Photos by StudioSchulz.com)

TW: How did it go in the beginning, trying to make a name for Stone Brewing?

Koch: The early years were rough. We initially came out with Stone Pale Ale and got a lot of complaints that it was too bitter, even though by today’s standards, it’s relatively mild. It was aggressive for the marketplace, but we forged ahead and put out Stone IPA, Stone Smoked Porter and Arrogant Bastard Ale within 18 months.

TW: So even though the Pale Ale had been perceived as too aggressive, you went ahead with the Arrogant Bastard. Did you think it would catch on with the public?

Koch: From the beginning, we’ve brewed the beers that we want to drink. We don’t care if its right for the fickle uneducated public. We only care if it’s right for us.

TW: How were sales back then?

Koch: Minimal. We didn’t have a restaurant, and we had very little on-site sales because the beer was only available in growlers. We sold draft to local bars and restaurants and then after ten months, we started bottling 22-ouncers. It was strictly in San Diego County, nobody else wanted to buy our beer. The craft beer industry plateaued in 1996, so we opened up at the perfect wrong time. We also set a standard that we would be ethical, which meant no illegal incentives for bars. We wouldn’t give away free kegs, which got me kicked out of more bars than I care to remember.

TW: Did you always believe Stone Brewing would make it?

Koch: I was always confident in our ability to brew flavorful beer and felt that as long as we had enough cash, the future would be fine. But for the first year-and-a-half we were bleeding around $30K a month. Sure, we questioned if we could survive. Lo and behold, in March 1998, we had our first break-even month.

TW: When did Stone Brewing take off and become what it is today?

Koch: Not right away. We built slowly and steadily. It took about six or seven years before wholesalers were interested in carrying our beer without us begging. We kept at it and our reputation grew. If we deserve credit for one thing, it was making unique beers with big character and never wavering.

TW: When did you feel as though, “Now we’re viewed as one of the top brewers?”

Koch: When some of the early lists from RateBeer.com and BeerAdvocate.com ranked us among the top breweries in the world. It’s always been my favorite metric. Just this past January, RateBeer came out with their annual list of “Best Brewers in the World 2010.” Stone Brewing came in ninth, but we’re the only brewery that’s been in the top ten each of the ten years they’ve compiled the list. And BeerAdvocate has three Stone brews in the “Top Beers on Planet Earth.” Those are consumer-rating websites, so to me, I can’t think of anything more flattering.

TW: In 2010, is Stone Brewing where you hoped it would be, given the recession?

Koch: Thankfully, the recession hasn’t really touched us. We opened Stone Brewing World Bistro and Gardens a little over three years ago. Now we’re the largest restaurant purchaser of local small-farm organic produce in San Diego County, which is pretty cool. It’s won architecture and landscaping awards. It’s a fantastic place to visit.

(Photo by Chris Cochran)

TW: If a beer comes out and isn’t a hit, do you serve it once, retool, or is it set for life?

Koch: There’s no hard and fast rule. We have several beers that are once-a-year special releases like the Stone Imperial Russian Stout or the Anniversary Ale, which is different every year. They’re limited and we always sell out of them. In the last ten years, we haven’t released a beer and discontinued it.

CLICK HERE FOR PART 2 OF OUR INTERVIEW WITH GREG KOCH TO FIND OUT WHY HE HOPES TROJANS AREN’T BEER POSERS.